Standing Financial
Instructions
For The Welsh Ambulance Services NHS Trust
July 2014
Foreword
These Model Standing Financial Instructions are issued by Welsh Ministers to NHS Trusts using powers of direction provided in section 19 (1) of the National Health Service (Wales) Act 2006. NHS Trusts in Wales must agree Standing Financial Instructions (SFIs) for the regulation of their financial proceedings and business. Designed to achieve probity, accuracy, economy, efficiency, effectiveness and sustainability in the conduct of business, they translate statutory and Welsh Government financial requirements for the NHS in Wales into day to day operating practice. Together with the adoption of Standing Orders (SOs), a Schedule of decisions reserved to the Board and a Scheme of delegations to officers and others, they provide the regulatory framework for the business conduct of the Trust.
These documents form the basis upon which the Trust's governance and accountability framework is developed and, together with the adoption of the Trust’s Values and Standards of Behaviour framework, is designed to ensure the achievement of the standards of good governance set for the NHS in Wales.
All Trust Board members and officers must be made aware of these Standing Financial Instructions and, where appropriate, should be familiar with their detailed content. The Director of Finance and ICT will be able to provide further advice and guidance on any aspect of the Standing Financial Instructions. The Board Secretary will be able to provide further advice and guidance on the wider governance arrangements within the Trust. Further information on governance in the NHS in Wales may be accessed at
www.wales.nhs.uk/governance-emanual/
Contents
Foreword 2
1. INTRODUCTION 8
1.1 General 8
1.2 Overriding Standing Financial Instructions 8
1.3 Financial provisions and obligations of NHS Trusts 9
2. RESPONSIBILITIES AND DELEGATION 9
2.1 The Board 9
2.2 The Chief Executive and Director of Finance and ICT 10
2.3 The Director of Finance and ICT 10
2.4 Board members and Trust officers, and Trust Committees 11
2.5 Contractors and their employees 11
3. AUDIT, FRAUD AND CORRUPTION, AND SECURITY MANAGEMENT 11
3.1 Audit Committee 11
3.2 Chief Executive 12
3.3 Internal Audit 13
3.4 External Audit 13
3.5 Fraud and Corruption 15
3.6 Security Management 16
4. INTEGRATED PLANNING 16
4.1 Integrated Medium Term Plan 16
4.2 Plan details and approval 17
5. BUDGETARY CONTROL 18
5.1 Budget Setting 18
5.2 Budgetary Delegation 19
5.3 Budgetary Control and Reporting 19
5.4 Capital Expenditure 20
5.5 Monitoring Returns 20
6. ANNUAL ACCOUNTS AND REPORTS 21
7. SHARED AND HOSTED SERVICES ARRANGEMENTS 21
8. BANKING ARRANGEMENTS 22
8.1 General 22
8.2 Bank Accounts 22
8.3 Banking Procedures 23
8.4 Tendering and review 23
9. INCOME, FEES AND CHARGES AND SECURITY OF CASH, CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS 24
9.1 Income Generation 24
9.2 Income Systems 24
9.3 Fees and Charges 24
9.4 Debt Recovery 24
9.5 Security of Cash, Cheques and other Negotiable Instruments 25
10. GRANT FUNDING, PROCUREMENT AND CONTRACTING FOR GOODS AND SERVICES 25
10.1 Policies and procedures 26
10.2 Corporate Principles underpinning Grants Management 26
10.3 Grant Procedures 27
10.4 Policies and procedures 28
10.5 Procurement Principles 28
10.6 EU Directives Governing Public Procurement 29
10.7 Sustainable Development 29
10.8 Equality of opportunity 30
10.9 Procurement Procedures 30
10.10 Procurement Thresholds 30
10.11 Small and Medium Sized Enterprises (SMEs), Third Sector Organisations (TSOs) and Supported Factories and Businesses (SFBs) 31
10.12 Contract Management 31
11. CONTRACTS FOR HEALTH CARE SERVICES 31
11.1 Health care agreements 31
11.2 Statutory provisions 32
11.3 Reports to Board on Health Care Agreements (HCAs) 32
12. PAY EXPENDITURE 32
12.1 Remuneration and Terms of Service Committee 32
12.2 Funded Establishment 33
12.3 Staff Appointments 33
12.4 Payroll 33
12.5 Contracts of Employment 35
13. NON-PAY EXPENDITURE 35
13.1 Delegation of Authority 35
13.2 Requisitioning 35
13.3 The Director of Finance and ICT’s responsibilities 36
13.4 Prepayments 37
13.5 Official orders 38
13.6 Duties of Budget Holders and Managers 38
14. CAPITAL INVESTMENT, FIXED ASSET REGISTERS AND SECURITY OF ASSETS 39
14.1 NHS Capital Investment 40
14.2 Capital Financing with the Private Sector 41
14.3 Asset Registers 41
14.4 Security of Assets 42
15. STORES AND RECEIPT OF GOODS 43
15.1 General position 43
15.2 Control of Stores, Stocktaking, condemnations and disposal 43
15.3 Goods supplied by an NHS supplies agency 44
16. DISPOSALS AND CONDEMNATIONS, LOSSES AND SPECIAL PAYMENTS 44
16.1 Disposals and Condemnations 44
16.2 Losses and Special Payments 45
17. INFORMATION MANAGEMENT AND TECHNOLOGY 46
17.1 Information Management & Information Technology (IM&T) Strategy 46
17.2 Responsibilities and duties of the responsible Director 47
17.3 Responsibilities and duties of the Director of Finance and ICT 47
17.4 Contracts for computer services with other health bodies or outside agencies 48
17.5 Risk assurance 48
18. PATIENTS' PROPERTY 48
18.1 NHS Trust Responsibility 48
18.2 Responsibilities of the Chief Executive 49
18.3 Responsibilities of the Director of Finance and ICT 49
19. FUNDS HELD ON TRUST 49
19.1 Corporate Trustee 49
19.2 Accountability to Charity Commission and the Welsh Ministers 50
19.3 Applicability of Standing Financial Instructions to funds held on Trust 50
20. RETENTION OF RECORDS 50
20.1 Responsibilities of the Chief Executive 50
PROCUREMENT OF WORKS, GOODS AND SERVICES 51
Supplementary Guidance 51
1. General 51
2. Ordering 53
3. Quotations 54
4. Competitive Tendering 55
5. Invitation to Tender 55
6. Pre-tender discussions 56
7. Electronic Tendering / Quotations Code 56
8. Delivery, Receipt and Safe Custody of Tenders 59
9. Opening and Validity of Tenders 60
10. Evaluation, Acceptance and Extension of Tenders 61
11. Post Tender Discussions 62
12. Notification of Results of Tenders 62
13. Contracts 63
14. Contract Management 63
15. Collaborative Contracts 64
16. Construction Procurement 64
17. Disposals 64
Appendix 1 66
ELECTRONIC TENDERING CODE 66
Schedule 2 70
CONTRACT NOTIFICATION ARRANGEMENTS 70
e-mails from Head of Financial Control & Governance, 70
Department for Health, Social Services and Children to Trust Directors of Finance 70
Procurement Services Contracting Briefing Paper 97
Contract Details 97
SWOT Analysis 97
Contract Proposal 98
Contract Management 99
Communications 99
ACCEPTANCE 99
Welsh Ambulance Services NHS Trust
(WAST)
1. INTRODUCTION
1.1 General
1.1.1 These Model Standing Financial Instructions are issued by Welsh Ministers to NHS Trusts using powers of direction provided in section 19 (1) of the National Health Service (Wales) Act 2006. NHS Trusts in Wales must agree Standing Financial Instructions (SFIs) for the regulation of their financial proceedings and business. They shall have effect as if incorporated in the SOs.
1.1.2 These SFIs detail the financial responsibilities, policies and procedures adopted by Welsh Ambulance Services National Health Service Trust “the Trust”. They are designed to ensure that the Trust’s financial transactions are carried out in accordance with the law and with Welsh Government policy in order to achieve probity, accuracy, economy, efficiency, effectiveness and sustainability. They should be used in conjunction with the Schedule of decisions reserved to the Board and the Scheme of delegation adopted by the Trust.
1.1.3 These SFIs identify the financial responsibilities which apply to everyone working for the Trust and its constituent organisations. They do not provide detailed procedural advice and should be read in conjunction with the detailed departmental and financial procedure notes. All financial procedures must be approved by the Director of Finance and ICT and Audit Committee.
1.1.4 Should any difficulties arise regarding the interpretation or application of any of the SFIs then the advice of the Board Secretary or Director of Finance and ICT must be sought before acting. The user of these SFIs should also be familiar with and comply with the provisions of the Trust’s SOs.
1.2 Overriding Standing Financial Instructions
1.2.1 Full details of any non compliance with these SFIs, including an explanation of the reasons and circumstances must be reported in the first instance to the Director of Finance and ICT and the Board Secretary, who will ask the Audit Committee to formally consider the matter and make proposals to the Board on any action to be taken. All Board members and Trust officers have a duty to report any non compliance to the Director of Finance and ICT and Board Secretary as soon as they are aware of any circumstances that has not previously been reported.
1.2.2 Ultimately, the failure to comply with SFIs and SOs is a disciplinary matter that could result in an individual’s dismissal from employment or removal from the Board.
1.3 Financial provisions and obligations of NHS Trusts
1.3.1 The financial provisions and obligations for NHS Trusts are set out under Schedule 4 of the NHS (Wales) Act 2006 (C.42). The Board as a whole and the Chief Executive in particular, in their role as the Accountable Officer for the organisation, must ensure the Trust meets its statutory obligation to perform its functions within the available financial resources.
1.3.2 The financial obligation as set out in Schedule 4 is as follows:
(1) Each NHS trust must ensure that its revenue is not less than sufficient, taking one financial year with another, to meet outgoings properly chargeable to revenue account.
(2) Each NHS trust must achieve such financial objectives as may from time to time be set by the Welsh Ministers with the consent of the Treasury and as are applicable to it.
(3) Any such objectives may be made applicable to NHS trusts generally, or to a particular NHS trust or to NHS trusts of a particular description.
2. RESPONSIBILITIES AND DELEGATION
2.1 The Board
2.1.1 The Board exercises financial supervision and control by:
a) Formulating the Medium Term Financial Plan as part of the Integrated Medium Term Plan;
b) Requiring the submission and approval of budgets within approved allocations/overall income;
c) Defining and approving essential features in respect of important policies and financial systems (including the need to obtain value for money and sustainability); and
d) Defining specific responsibilities placed on Board members and Trust officers, and Trust committees as indicated in the ’Scheme of delegation’ document.
2.1.2 The Board has resolved that certain powers and decisions may only be exercised by the Board in formal session. These are set out in the ‘Schedule of matters reserved to the Board’ document. All other powers have been delegated to committees or sub-committees that the Trust has established or to an officer of the Trust in accordance with the ‘Scheme of delegation’ document adopted by the Trust.
2.2 The Chief Executive and Director of Finance and ICT
2.2.1 The Chief Executive and Director of Finance and ICT will, as far as possible, delegate their detailed responsibilities, but they remain accountable for financial control.
2.2.2 Within the SFIs, it is acknowledged that the Chief Executive is ultimately accountable to the Board, and as Accountable Officer, to the Welsh Government, for ensuring that the Board meets its obligation to perform its functions within the available financial resources. The Chief Executive has overall executive responsibility for the Trust's activities; is responsible to the Chair and the Board for ensuring that financial obligations and targets are met; and has overall responsibility for the Trust’s system of internal control.
2.2.3 It is a duty of the Chief Executive to ensure that Board members and Trust officers, and all new appointees are notified of, and put in a position to understand their responsibilities within these SFIs.
2.3 The Director of Finance and ICT
2.3.1 The Director of Finance and ICT is responsible for:
a) Implementing the Trust's financial policies and for co-coordinating any corrective action necessary to further these policies;
b) Maintaining an effective system of internal financial control including ensuring that detailed financial procedures and systems incorporating the principles of separation of duties and internal checks are prepared, documented and maintained to supplement these instructions;
c) Ensuring that sufficient records are maintained to show and explain the Trust's transactions, in order to disclose, with reasonable accuracy, the financial position of the Trust at any time; and
d) Without prejudice to any other functions of the Trust, and Board members and Trust officers, the duties of the Director of Finance and ICT include:
(i) the provision of financial advice to other Board members and Trust officers, and to Trust committees and Advisory Groups,
(ii) the design, implementation and supervision of systems of internal financial control, and
(iii) the preparation and maintenance of such accounts, certificates, estimates, records and reports as the Trust may require for the purpose of carrying out its statutory duties.
2.3.2 The Director of Finance and ICT is responsible for ensuring an ongoing training and communication programme is in place to affect these SFIs.
2.4 Board members and Trust officers, and Trust Committees
2.4.1 All Board members and Trust officers, and Trust committees, severally and collectively, are responsible for:
a) The security of the property of the Trust;
b) Avoiding loss;
c) Exercising economy, efficiency and sustainability in the use of resources; and
d) Conforming to the requirements of SOs, SFIs, Financial Procedures and the Scheme of delegation.
2.4.2 For all Board members and Trust officers, and Trust committees who carry out a financial function, the form in which financial records are kept and the manner in which Trust Board members and officers, and Trust committees discharge their duties must be to the satisfaction of the Director of Finance and ICT.
2.5 Contractors and their employees
2.5.1 Any contractor or employee of a contractor who is empowered by the Trust to commit the Trust to expenditure or who is authorised to obtain income shall be covered by these instructions. It is the responsibility of the Chief Executive to ensure that such persons are made aware of this.
3. AUDIT, FRAUD AND CORRUPTION, AND SECURITY MANAGEMENT
3.1 Audit Committee
3.1.1 An independent Audit Committee is a central means by which a Board ensures effective internal control arrangements are in place. In addition, the Audit Committee provides a form of independent check upon the executive arm of the Board. In accordance with SOs the Board shall formally establish an Audit Committee (or equivalent) with clearly defined terms of reference. Detailed terms of reference and operating arrangements for the Audit Committee are set out in Schedule 3 to the SOs. This committee will follow the guidance set out in the NHS Wales Audit Committee Handbook.